Japan Jolts Bond Market in the Wrong Direction

By

Kana Inagaki And

Eleanor Warnock

Updated May 15, 2013 6:50 p.m. ET

TOKYO—The Bank of Japan's monetary-easing campaign has hit a snag: Rising bond yields have emerged as a potential barrier to growth.

Contrary to the central bank's intentions, interest rates in the $10 trillion market in government bonds have climbed steadily higher since the easing program, aimed at stimulating the economy, was unveiled on April 4. That is now starting to affect the real economy, with banks pushing up rates on...